Radical Change Required ....
With the introduction in recent years of Low Cost Budget Airlines the major carriers have been seriously hit. They have hoped that this fad would go away and they would be able to ride the wave. It is now apparent that it will not. Left with this problem major airlines are faced with surviving with their monster airlines with political and financial burdens that appear to be insurmountable. For the proactive CEO there is a way.
There are only two passenger markets as I see it. Economy Passengers and Business Class Passengers. As I see it the whole industry will be separated into two separate entities, one for the Economy passenger and one for the Business Passenger. This is the only way the major carriers can survive this turmoil. How they do this is no easy task and will take a brave CEO to do it. In an ideal world they would wipe the slate clean and start again, or start now building up this concept.
Using British Airways as a model as this is my background, start a Low Cost Budget airline serving shorthaul routes out of London, (why did they get rid of GO?) both holiday and business destinations, (not everyone has the resources for business class fares) not as a hub, but as a bus stop service. The main airline would continue as a stop gap during the transition period providing economy passengers with budget service and pricing, and business class services worldwide removing the first class section, with a higher level of inflight service and personal attention, the main airline would continue losses, but would prompt further cost cutting and removing the fat of this giant carrier. Another Low Cost Start up Budget Airline would be started to cater solely for the Business Passenger and their requirements, in the same way Lufthansa have done with PrivatAir. Each of the new startups would have individual cost bases and would not be part of 'Mainline'. As the profitability of the two new startups increases the justification of winding down 'Mainline' becomes obvious and the airline becoming one again with a low cost base, with two separtely controlled market targetted businesses. Whilst it will take a long time, at least the city will see that an effort is being made with proven business history, but could BA really pull this off. Without some form of radical change it will end up like the rest of the US Carriers 'going broke' !!